As Trump Tariffs Hit, The U.S. Is Losing The China Trade War — Big Time
"Speaking of the American economy... HOW TRUMP'S TARIFFS ON MEXICO ARE TAKING JOBS FROM U.S. WORKERS [...] Instead, Mid Continent’s factory has doubled in size since Deacero’s purchase. The company, facing fewer restrictions on steel exports after the North American Free Trade Agreement, shipped steel into Missouri, willing to pay skilled workers more to take advantage of cheaper energy costs in the United States and a location that allowed swift delivery to U.S. customers."
That last sentence reminds us there is more than one reason (say company tax) why companies operate in the U.S.A.
JED GRAHAM 7/05/2018
The major trade news this week is President Trump's decision whether to hit China with new tariffs starting Friday. Those headlines — about whether the Trump tariffs aimed at China are on or off — will be huge for the stock market.
If they're on, then the U.S. will be at the outset of a technological cold war with Beijing .. https://www.investors.com/news/us-china-trade-war-donald-trump/ .. from which there may be no turning back. If they're off, then Wall Street will heave a sigh of relief, knowing that Trump's trade threats will prove to be mostly bark, not bite.
The stock market rally is under pressure, largely due to Trump trade war fears. The S&P 500 index rose solidly Thursday, reclaiming its 50-day moving average. The Dow Jones rallied to just above its 200-day line.
China is moving into the vacuum left after Trump's rejection of the 12-nation Trans-Pacific Partnership forged by President Obama to ensure lasting U.S. influence in the Far East.
"As protectionism concerns increase globally, it's important that the Asian region flies the flag of free trade," Japanese trade minister Hiroshige Seko said at a news conference, playing up potential for a year-end agreement.
Instead of major U.S. trading partners uniting against China, the U.S. is drawing fire from all sides for Trump tariffs. China is widely seen as the prime culprit in global steel overcapacity that spurred Trump's 25% steel tariff. Yet China has been a minor steel exporter to the U.S., so Trump picked a fight with Japan, the EU, Mexico and Canada.
While Japan remains wary of China, Trump's metal tariffs and abandonment of the TPP have Tokyo focused on tighter links with Beijing.
Trump is trying to use America's big trade deficit as leverage to secure an easy trade-war win. But any win against China will be short term and do little to narrow its $375 billion trade surplus with the U.S. and alter its systematic push to gain access to the intellectual property of U.S. firms.
Before negotiations hit a wall, Trump largely declared victory in late May, when China offered to boost U.S. purchases by $70 billion. Trump touted the emerging deal as a big win for American farmers. The loser wouldn't be China, but other countries that supply it.
No question, stocks will rally if such a deal reemerges to avert a China trade war. But China will have given up little, while the U.S. will have ceded a lot
White House civil war breaks out over trade [...] According to more than half a dozen people inside the White House or dealing with it, the bitter fight has set a hardline group including senior adviser Steve Bannon .. http://www.cnbc.com/stephen-bannon/ .. and Trump trade adviser Peter Navarro against a faction led by Gary Cohn, the former Goldman Sachs executive who leads Mr Trump's National Economic Council.
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